Social Enterprises: 6 Examples Fighting Homelessness

A social enterprise is an organization that uses commercial strategies and revenue-generating activities to advance a social or environmental mission rather than to maximize profit for shareholders.

Social enterprises earn revenue by selling goods or services, just like traditional businesses, rather than depending only on grants or donations. Candle sales, hydroponic kits, street newspapers, and laundry services are all examples of paid products or services that fund a social mission. Because the enterprise generates its own income, it can reinvest surplus profits directly into its cause instead of relying solely on philanthropic support to stay running.

Social enterprises and nonprofits both prioritize social impact, but they differ in funding and legal structure. Nonprofits typically rely on grants, donations, and fundraising to operate, while social enterprises generate their own revenue through selling products or services and reinvest that income into their mission. Many social enterprises are structured as for-profit entities, even though generating shareholder profit isn't their main objective.

A social enterprise has no single required legal structure — it can be set up as a traditional corporation, an LLC, a benefit corporation, a low-profit limited liability company (L3C), or a nonprofit, depending on funding needs and jurisdiction. Founders raising capital from investors often lean toward a for-profit corporation, while those serving a community need directly may choose a nonprofit format. A certified B Corporation is one common framework social enterprises adopt to formalize accountability around social and environmental performance.

Starting a social enterprise begins with identifying a specific social or environmental need and a sustainable way to fund a solution through sales rather than donations alone. From there, founders typically choose a legal structure, outline anticipated funding sources, and build a team who can run day-to-day operations. Many small social enterprises launch this way, starting small — sometimes with just a handful of founders — before formalizing programs and hiring from the populations they aim to serve.

Social enterprises can be either for-profit or nonprofit — the label describes a mission-driven approach rather than one fixed legal category. Some operate as traditional for-profit corporations that donate a share of proceeds to a cause, while others register as nonprofits with an earned-income arm. What unites them is reinvesting surplus revenue into their social objective instead of distributing it primarily to shareholders.